The Government appears to be backtracking on controversial plans to introduce a new tax rule which would force many blind people to pay VAT on white sticks and Braille products.

Customs and Excise proposed closing a loophole which allows private hospitals and NHS Trusts legally to avoid paying the 17.5% tax on products for the blind.

But the Prime Minister, Tony Blair, reportedly said on Saturday that the change was "not going to happen".

The Royal National Institute for the Blind warned that "a significant number" of blind people would be disadvantaged by the rule, which is due to come into effect on January 1, 1998.

The Director General of the RNIB, Professor Ian Bruce, said disabled people are among the poorest in society and any tax rises would have a major impact on them.

Under fire

The row comes at a time when the Government is already under fire from disabled groups for refusing to rule out the possibility that its review of the welfare system will lead to cuts in disability benefits.

Mr Blair made no mention of the VAT issue in his speech in his Sedgefield constituency on Saturday morning.

But Sky News political correspondent Paul Bromley said that after the speech the Prime Minister had told him "that as far as these white sticks are concerned, it's not going to happen".

Customs and Excise also agreed to meet the RNIB on Tuesday to discuss its concerns. A spokeman said the VAT changes were not intended to make the blind pay tax on personal and domestic aids.

Badly drafted rule

Peter Jenkins, the head of VAT at Ernst and Young, which advises the Charities Tax Reform Group, said Customs and Excise had drafted the law "very carelessly".

He said: "The law says that if someone is being treated as an in-patient or an out-patient they will have to pay VAT on aids like white canes or Braille watches. There is a get-out clause which means that if they are bought from an independent supplier they will not have to pay VAT.

"But because the RNIB cares for many blind people in rehabilitation homes it is not seen as independent and so people will not be exempt from paying VAT on aids sold by the charity from its shop in central London or by mail order.

"This will particularly affect people who have just gone blind as they will probably be being cared for by the RNIB in some way and will need to buy many products from them. "The RNIB subsidises products for the blind and checks that they are of high quality."

Mr Jenkins said the law could also affect charities like Help the Aged who sell products like walking frames to people they care for.

The National Federation for the Blind also reacted angrily to the new tax rule on white sticks and Braille products. Its spokeswoman, Jill Allen-King, said: "Many people don't realise that we don't get sticks and vital everyday equipment on the NHS, and now we are going to have to pay even more.

"I have had many calls already from our members saying this is the last straw."

Mrs Allen-King added that many blind people need to buy white sticks, costing £5 to £15 each, every month due to damage. "Everything made for blind people is very expensive and all this makes life even worse," she said. A former Labour Minister for the Disabled, Lord Morris of Manchester, also made an urgent plea for the Government not to impose the tax.
 

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